Saudi Commitment

September 12, 1990|By John Lobick.

CHICAGO — Why should the U.S. help protect Saudi Arabia? Because Saudi Arabia has and is keeping the American economy afloat.

At U.S. Treasury auctions, Japan regularly buys the majority of American debt notes, thus giving the impression that Japan is buying up the U.S. However, within 30 days of purchase, Japan usually unloads about 70 percent of those notes in the world currency markets. Japan does not want to get stuck with long-term American debt. The Saudis own more U.S. debt notes than anyone. Why should the U.S. protect Saudi Arabia? Because the Saudis are making a long-term commitment to the U.S.